VAT on property service charges
A new Revenue and Customs Brief (6-2018) entitled VAT exemption for all domestic service charges has recently been published by HMRC. The brief explains changes to the Extra Statutory Concession (ESC) 3.18 VAT: exemption for all domestic service charges may be applied. The ESC was introduced in February 1994 to enable the same VAT treatment on mandatory service charges to a freehold occupant as to a leaseholder or tenant living on the same common estate.
In the Brief, HMRC identified a number ... read more
Are you ready for VAT filing changes April 2019?
The introduction of Making Tax Digital (MTD) for VAT is fast approaching.
From April 2019, some 1 million businesses with a turnover above the VAT threshold (currently £85,000) will have to keep their records digitally (for VAT purposes only), and provide their VAT return information to HMRC through MTD compatible software. The deadlines for sending VAT returns and making payments are not changing.
Businesses with a taxable turnover below the VAT threshold can also opt to use MTD for VAT if ... read more
Is your income approaching £100,000?
For high earning taxpayers, the personal allowance is gradually reduced by £1 for every £2 of adjusted net income that exceeds £100,000 irrespective of age. Adjusted net income is total taxable income before any personal allowances, less certain tax reliefs such as trading losses and certain charitable donations and pension contributions.
This means that for the current tax year, an adjusted net income between £100,000 and £123,700 creates an effective marginal rate of tax of around 60% for ... read more
Qualifying for VAT special schemes
There are three main special VAT schemes available to small businesses. These are the flat rate scheme, the annual accounting scheme, and the cash accounting scheme. The turnover levels for joining and leaving these schemes vary.
The flat rate scheme is open to businesses that expect their annual taxable turnover in the next 12 months to be no more than £150,000, excluding VAT. However, businesses that are already using the scheme can continue to do so until their turnover threshold exceeds ... read more
When is lettings relief available?
In general, there is no Capital Gains Tax (CGT) on a property which has been used as the main family residence. This relief from CGT is commonly known as 'private residence relief'. However, where all or part of the home has been rented out, the entitlement to relief may be affected. Home owners that let all or part of their house may not benefit from the full private residence relief but can benefit from lettings relief.
The maximum amount of letting relief due is the lower ... read more
How the £1,000 trading allowance works
There is a £1,000 tax allowances for miscellaneous trading income that has been available to taxpayers since April 2017. This is known as the trading allowance. The income raised from these kinds of ventures is usually supplemental to a taxpayer’s main income, but this is not always the case.
The exemption from tax applies to taxpayers who have trading income of up to £1,000 from:
casual services, for example, babysitting or gardening
hiring personal equipment, for ... read more
Citizens’ rights in the event of a no deal Brexit
The government has published a policy paper on what might happen to EU citizens in the UK and UK nationals in the EU, in the event of a “no deal” Brexit.
The government has confirmed that those EU citizens and their family members who are resident in the UK by 29 March 2019 will have their rights protected, i.e. they will be able to stay and will continue to be able to work, study and access benefits and services in the UK on the same basis as they do now.
To achieve this, the UK will ... read more
Could you claim expenses and an early tax refund?
HMRC is reminding employees that they may be able to claim a tax rebate if they have incurred certain expenses related to their employment. HMRC’s press release on the matter specifically identifies workers including nurses, hairdressers, construction workers and those in retail and food that have to dip into their own pockets to pay for work-related expenses like car mileage, replacing or repairing small tools, or maintaining branded uniforms. A claim can be made online now with the tax relief ... read more
X-factor VAT bonus
The Chancellor, Philip Hammond has announced that the government will waive the VAT equivalent on the sales of this year’s X-Factor Christmas Charity single. All proceeds from the sale of the single are going to two children’s charities; Together for Short Lives and Shooting Star Chase Children’s Hospice.
Both charities provide support for children with life-limiting illnesses and their families. The donation will be the equivalent of the sum of the VAT receipts collected on sales of the ... read more
Employing someone to work in your home
When you employ someone to work in your home, it is your responsibility to ensure you meet the employee's rights and deduct the correct amount of tax from their salary. This can include employees such as a nanny, housekeeper, gardener or carer. The rules are different if the person is self-employed or paid through an agency.
If you employ anyone they must:
have an employment contract
be given payslips
work no more than the maximum hours allowed per week
be paid at least the National ... read more